Buying a home is an essential commitment that holds great significance. It’s a financial milestone in life. It’s exciting, exuberating and perhaps even electrifying. Yet, the reality is that the purchasing process may not be as simple as you think. Here’s our straightforward 10-step guide to help you on your journey to buying an HDB resale flat.
Step 1: Register your Intent to Buy
Start your journey off by registering an Intent to Buy. Log into the HDB Resale Portal with your SingPass. This allows HDB to evaluate your eligibility to buy an HDB resale flat.
To be eligible, the applicant(s) will need to meet the following criteria:
- Be eligible to purchase resale flat under any one of these schemes:
- Public Scheme
- Fiancé/Fiancée Scheme
- Single Singaporean Citizen Scheme
- Joint Singles Scheme
- Non-citizen Spouse Scheme
- Orphans Scheme
- Conversion Scheme
- Comply with the Ethnic Integration Policy (EIP) at the time of submitting Resale Application
If you’re purchasing a flat with other applicants like your family or partner, note that only one of you needs to register.
Your registered Intent to Buy will be valid for only 12 months. You’ll have to re-apply again when it expires.
Step 2: Get an Approval in Principle (AIP)
Next, get an AIP with a bank. An AIP is a negotiated arrangement that states the bank’s commitment to extend you a home loan when you intend to buy a house. The agreement will be valid for 30 days (varies among banks).
Getting the AIP helps you nail down your budget. For instance, you could have an AIP of $300,000 extended to you, and based on the loan-to-value limit of 75%; you can probably get a resale property of $400,000.
Step 3: Go house shopping
Once you have your budget, start shopping for your dream home online. You can find property listings from various property portals.
You can even do it the old-school way — flipping through property ads in the newspapers! Found some listings that fit within your budget? Arrange for a viewing!
Alternatively, you may also choose to engage a property agent to help you find the right property.
Step 4: Choose between an HDB loan or a bank loan
Your next big step is to decide on how you want to finance your property purchase. There are 2 ways:
| HDB loan | Bank loan |
|---|---|
| Need a valid HDB Loan Eligibility (HLE) letter before you can get an OTP from the seller | Need a valid Letter of Offer (LO) before you can exercise the OTP. |
| Interest rate pegged to CPF OA interest rate +0.1% | Choose between fixed and floating rates |
| Loan up to 90% of the remaining lease | Loan up to 75% |
Find out the differences between an HDB loan and bank loan here.
Step 5: Get an Option to Purchase (OTP)
After you’ve settled on your choice of loan, negotiate with the seller on the right price for the property.
Upon reaching an agreement, you can make an offer, and the seller will extend to you an Option to Purchase (OTP).
The OTP is a legally binding contract between you and the seller. It guarantees your right to purchase the flat at the agreed price. The OTP disallows the seller to sell the property for the next 21 days.
Also, you’ll need to pay the option fee ranging from $1 to $1,000. This option fee lets you put in your ‘reservation’ for the flat. Once you’ve paid the option fee, you’re obliged to exercise your OTP within 21 days, or else the option fee will be forfeited.
After 21 days, the seller is free to sell the flat if there is no action from you.
Step 6: Submit a Request For Value to HDB
You’ll need to submit a request for the value of the flat you’re buying on the HDB Resale Portal. Do this one day after the Option Date on your OTP.
The valuation process will take around 5 to 7 working days. Upon receiving the valuation report, you will need to submit it to the bank to complete the loan application so the letter of offer can be prepared.
Step 7: Exercise the OTP
Once the valuation report is out, the next step is to sign on the OTP. Do note that you need to have the bank’s letter of offer or HLE approval prior to exercising the OTP, and paying the balance of the option exercise fee.
Step 8: Pay fees and the submit flat application to HDB
Leading up to the completion, you’ll have to make payments for fees such as Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD), and other legal fees if applicable.
In addition, both you and the seller will have to submit the respective parts of the resale application to HDB. Once either party submitted their portion, the other party will need to send the corresponding portion within 7 days. If not, the application will expire, and you’ll need to re-apply with HDB.
Step 9: Wait for HDB approval
Once you and the seller have submitted the resale application, HDB will process it. You may check the application progress on the HDB Resale Portal.
If everything is in order, HDB will inform both of you by SMS or email within 10 working days. The transaction will be completed 8 weeks after the approval, and both parties will need to endorse all the documents and settle all the necessary fees within that time frame.
Step 10: Completion of Resale
After everything has been granted (including the API), HDB will arrange for a Resale Completion Appointment. Both you and the seller will need to be physically present to complete the resale transaction at the HDB Hub.
We hope that this guide has served you well. If you want to know more about the nitty-gritty details involved in purchasing an HDB resale flat that we’ve not included here, feel free to contact us for a chat.
Read our guide on purchasing a resale private property here.
Read our guide on buying a private BUC here.
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